TfL and GLA hold more than £20bn in debt, new analysis shows

Transport for London has emerged as the most indebted local authority body in the UK, with borrowing approaching £14 billion, according to new analysis.

Research by the TaxPayers’ Alliance found TfL held £13.96 billion of debt during 2025/26, making it the largest borrower among local authority organisations across the country.

The Greater London Authority (GLA) ranked second with £4.75 billion of borrowing, taking the combined debt of London’s strategic authorities to more than £20 billion.

The findings come as total local authority debt across the UK reached a record £155 billion.

TfL said its borrowing has funded major infrastructure upgrades across the capital, including accessibility improvements, station modernisation projects, signalling upgrades and the rollout of new trains on the Docklands Light Railway and Piccadilly Line.

Officials also pointed out that the transport authority has recorded an operating surplus for the past three years, meaning its day-to-day income has exceeded running costs.

A TfL spokesperson said borrowing remains an important way of financing investment in London’s transport network and stressed that all borrowing remains within approved affordability limits.

The GLA defended its own borrowing levels, arguing that debt has helped fund major projects such as the Elizabeth Line and the Northern Line extension.

A spokesperson said the authority sets a balanced budget each year and that all borrowing is fully funded. The TaxPayers’ Alliance criticised the scale of borrowing, arguing that Londoners were being exposed to significant levels of debt while continuing to face transport challenges.

Benjamin Elks, grassroots development manager at the TaxPayers’ Alliance, told the Local Democracy Reporting Service (LDRS): “Londoners will be horrified that GLA bodies are sitting on more than £20 billion of debt, with TfL alone owing an eye-watering £14 billion.”

“Under the Mayor’s watch, taxpayers and farepayers are being left exposed to a mountain of borrowing while basic transport performance remains a constant source of frustration. Sadiq Khan must get a grip on City Hall’s finances, rein in TfL’s debt pile and stop treating Londoners as an endless cash machine.” 

Over a third of the debt held by both TfL and the GLA originated from loans provided by the Public Works Loan Board (PWLB), a government-backed lending scheme.

Historically, local authorities were able to borrow through the PWLB to purchase commercial property and other assets in the hope of generating income. However, the practice was effectively banned in 2020 after concerns that some councils had accumulated unsustainable levels of debt by borrowing primarily to invest for profit.

Under current rules, authorities must confirm they are not borrowing primarily for yield at any point during the borrowing cycle.

Responding to the findings, a TfL spokesperson said borrowing remained an essential tool for delivering major infrastructure improvements across the capital. They said: “Borrowing has been, and remains, an important source of financing for Transport for London (TfL) and supports its capital investment programme which supports not only the city, but the wider UK through its extensive supply chain.

“All incremental borrowing raised by TfL is in line with its planned prudent limits authorised by its Board and within its own affordability limits. TfL borrowing is monitored by each of the three global credit rating agencies who have all recently reaffirmed TfL’s credit quality.

“Borrowing is only used to fund capital expenditure, and for the past three years, TfL has made an operating surplus, meaning its income covered the cost of operating its business while also partly paying for renewals and capital expenditure. Any operating surplus is then reinvested into further capital improvements, therefore minimising the need for additional borrowing.”

The Greater London Authority also defended its borrowing levels, arguing that debt has helped deliver major transport projects that have benefited London and the wider economy.

A GLA spokesperson said: “Being able to borrow has enabled the GLA and TfL to deliver great things for London, including the Elizabeth Line and the Northern Line extension – two huge infrastructure projects that have driven jobs and growth in London and around the country.

“The GLA sets an annual balanced budget that focuses on delivering on the issues that matter most to Londoners and all debt is fully funded.

“We operate under local authority rules, but the GLA and TfL are not councils and provide transport services for more people than the population of Scotland and Wales combined. That’s why it’s wrong to compare our borrowing levels with local councils.”

What does having such a large debt actually mean?

While the figures may sound alarming, large borrowing is common for major public bodies that fund long-term infrastructure projects.

TfL says much of its £14bn debt has been used to finance upgrades to London’s transport network, including new trains, station improvements, signalling upgrades and accessibility projects. The GLA has similarly borrowed to help fund major schemes such as the Elizabeth Line and the Northern Line extension.

However, borrowing comes with a cost. Interest payments and debt repayments must be made every year, meaning money that could otherwise be spent on public services is instead used to service debt.

Critics argue that higher debt leaves taxpayers exposed and reduces financial flexibility in the future, while supporters say borrowing is necessary to fund projects that generate economic growth and improve public services.

There is currently no suggestion that either TfL or the GLA is facing immediate financial difficulties. Both organisations maintain that their borrowing remains affordable and is being managed within approved limits.

UK’s most indebted local authority bodies (2025/26)